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Posted by on Sep 14, 2015 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 9/11/2015

AdvisorShares Weekly Market Review – Week Ending 9/11/2015

Highlights of the Prior Week

The Fate Of The Free World Hangs In The Balance

Macro

That headline is probably a bit much but the upcoming Fed meeting is arguably the most talked about most anticipated FOMC meeting of all time. There’s a long list of reasons to support both sides of the trade of will they or won’t they raise rates.

Reasons not to hike include;

  • The FOMC missed a window to do it earlier in the year and the economy has weakened
  • The IMF and World Bank have urged the Fed not to raise rates in part because other central banks are still aggressively easing
  • The Fed’s self-defined 2%  inflation target has not been met
  • GDP growth has been below the growth rate of past recoveries/expansions

Reasons to hike include;

  • The unemployment rate is well below the Fed’s self-defined target for raising rates
  • A zero percent interest rate policy is a policy of desperate times and times are no longer desperate
  • A hike will remove uncertainty
  • The Fed will have room to cut rates if the economy slows down

Against that backdrop equities moved higher last week. The Dow Jones Industrial Average was up 2.02%, the S&P 500 gained 2.04%, the NASDAQ added 2.92% and the Russell 2000 was ahead by 1.86%. There are countless other talking point on either side of the Fed decision and while we won’t hazard a guess as to what the FOMC might do but would remind readers that there is ample precedent for market reaction to these types of events to confound consensus expectations.

All of the foreign markets we regularly cover in this report were also up for the week including a wild week for the Nikkei 225 which after a 7% decline the previous week was up 2.65% for this past week which included a 7% gain in Wednesday’s session.

Global yields moved all over the place last week. The Ten Year US Treasury Note added six basis points to 2.18%, the German bund fell two basis points to 0.65%, the French OAT tacked on four basis points to 1.05%, the Swiss ten year was the biggest mover adding seven basis points to now yield -0.07%, Spain moved up to 2.10% and the Italian ten year fell four basis points to 1.83%.

West Texas Intermediate Crude fell 3.86% on the week on the heels of a worst case scenario of $20 call out of Goldman Sachs. Extreme calls on various asset classes and markets in both directions are very common and rarely correct but they do create a buzz.

ETF News & Data

Fund flows were very interesting last week.There was an $8.5 billion outflow from the SPDR S&P 500 which was largest activity in the fund since several weeks in a row of massive flows around the start of the year that had the appearance of window dressing. There was also $4.8 billion in creations in the biotech sector.

There were only two funds launched last week; a foreign dividend fund from ProShares and an actively managed equity fund from Cambria.

Interesting Reads

According to TechInsider “The single biggest predictor of human happiness is the quality of [a person’s] relationships.”

That’s no trivial finding, with potentially huge implications for health and well-being. Several years ago, a major review on the topic concluded that “people with stronger social relationships had a 50% increased likelihood of survival [compared to] those with weaker social relationships.”

Sports

Serena Williams was not able to capture the Grand Slam of tennis after losing in the semi-finals of the US Open. The open was won by 33 year old Flavia Pennetta of Italy who announced that she will be taking the $3.3 million prize money into retirement at the end of the year.

We were saddened to learn of the passing of former ABA and NBA star Moses Malone over the weekend. Malone was of course successful in several stops along the way including three MVP seasons and an NBA championship with the Philadelphia 76ers in 1983. Malone was also named to both the ABA All-Time Team and the NBA 50th Anniversary All-Time Team.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, BBC
 
2015.9.14_Table1
 
Weekly ETF Flows

For September 7th, 2015 to September 11th, 2015

2015.9.14_Table2
 
S&P Sector Analysis

As for the sectors of the S&P 500, four outperformed the broad benchmark – Technology, Healthcare, Industrials, and Discretionary. The remaining six – Financials, Materials, Utilities, Staples, Telecom, and Energy – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 3.77% this week, with Technology outperforming all, and Energy coming in last.

For September 7th, 2015 to September 11th, 2015

As measured by the S&P 500 sector indices, respective performances were:

2015.9.14_Table3

david@mediaworksllc.com

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

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